Interviewed By Foo Boon Ping
In this Leadership Perspective Series, Samir Gupta, CEO, consumer banking at CIMB Group, discussed the strategy and opportunities that drive digital transformation. He tackled the bank’s strong performance and resiliency as shown by the growth in digital transactions, sales and foreign exchange transaction volume in Malaysia, Singapore and Thailand.
Samir Gupta led the digital transformation of CIMB. He has a track record of building digital and consumer-banking franchises in Asia, Middle East and Africa.
He steered the bank in accelerating digital adoption and worked towards achieving its target to become one of the leading banks in Southeast Asia through CIMB Forward23+ strategy. “Even as we continue to enhance our current platforms and improve usability and reliability, we are already in the process of developing our next-generation platforms. This is to ensure our platforms are future-proof and able to support both our customers and our organisation in the post-COVID-19 financial services landscape and beyond,” he said.
The digital transformation gained positive results and continues to drive the growth momentum in Malaysia, Thailand and Singapore. The bank saw a 50% increase in digital transactions and a 99.20% service reliability and availability level. The digital sales of CIMB products accounted for 48% of total sales in Malaysia as of October 2021.
Amid the pandemic, he remained focused on digital resilience, serving customers and the community, and empowering its employees. “If you value people, learn to trust them, and be astute in selecting the people who can contribute to your organisation, then you will have fulfilled one of the key responsibilities of resilient leadership,” he said.
When he was the consumer banking director of CIMB Niaga from 2010 to 2016, he led the sales, service and culture transformation across a network of 700 bank and finance company branches with
10,100 employees following the merger of Bank Niaga and Lippo Bank. He managed loan book of $4.8 billion and deposit base of $10 billion with complete range of consumer products including mortgage, auto, personal loans, cards, deposits, investment products, insurance and Islamic accounts.
Gupta has over 30 years of experience that started at UBS, where he worked as the credit officer in Singapore from 2005 to 2006, to Citi, where he stayed for 12 years as retail assets head, in Turkey, Middle East and Africa, then moved to Barclays as a managing director. He is the CEO of CIMB’s consumer banking business.
The following key points were discussed:
The following is the edited transcript of the interview:
Foo Boon Ping (FBP): What is the one key opportunity and challenge that your bank faces in this age of digital innovation and disruption?
CIMB’s Forward23+ strategic plan centres on digitalisation for sustainability
Samir Gupta (SG): Digitalisation, both within the bank and for our customers, remains a key priority in CIMB’s Forward23+ strategic plan. In line with the accelerated digital adoption, we will continue to invest in and build technology resilience, develop new and advanced digital capabilities to increase productivity and improve customer experience. The rapid digital adoption, due in part to the pandemic, led to a boom in e-commerce and online transactions, in addition to cashless payment methods such as credit and debit cards and quick response (QR) payments.
Amid this backdrop, the key opportunity is in digitising for value, as part of our Forward23+ strategic theme of delivering sustainable financial returns. This in turn, supports driving cost efficiency, another key component of our strategic plan. Given this, a comprehensive approach to digitalisation across multiple levers is required, including technology transformation, digitising customer and internal journeys and driving customer-centricity.
There are several key challenges that need to be addressed to be successful, which include the following: Culture – Digitalisation is not just a matter of technology. It is a mindset change, and that means a cultural transformation where one needs to bring the organisation along the journey, break silos, and enable employees to work in an agile manner. Empowerment, along with the ability to move fast and digital-first thinking, are important fundamentals that need to be inculcated within the organisation alongside digitalisation initiatives.
Transform and digitise, not just digitise – It is important that the organisation does not digitise only for the sake of digitalisation. It is important to understand the desired final outcome and customer pain points to be resolved. This entails defining the solution and process for that outcome and determining the appropriate and optimal digitalisation approach. Anchoring digitalisation programmes to business outcomes are important to ensure alignment to the organisation’s objectives.
Start small, pilot and then scale – Rather than always start and aim big, take a minimum viable product (MVP) approach to the digitalisation programme so we can adapt and adopt as needed. At CIMB, we decided to start small, pilot the programme with a few customer journeys, understand what works and doesn’t work and then pivot to deliver.
FBP: What are your views of digital transformation driving organisational and operational resilience during COVID-19? How has COVID-19 catalysed opportunities for digital transformation and how has it impacted your institution?
Take into consideration digital resilience, customers and community, and employees
SG: As COVID-19 disrupted countries and economies, CIMB Group introduced its Forward23+ strategic plan in 2020, building on its earlier mid-term strategy and taking into account the new operating landscape.
It was important to adapt fast to maintain resilience during the pandemic. A large part of this entailed leveraging the power of digitalisation to continue to meet our customers’ and employees’ needs.
Digital resilience – The ability to scale and adapt underscored the operational part of staying resilient during the pandemic. The organisation ensured that systems remained robust and available around the clock considering the greatly increased need for remote working, collaboration and communication, migration of digital assets to a cloud infrastructure, supporting higher demand for digital customer transactions and greater reliance on data security options.
Customers and the community – We continued to address the needs of all segments of customers and the community. We implemented the CIMB MicroBizReady, a programme to groom micro-small and medium-sized enterprise (SME) entrepreneurs from the B40 community or those in the lowest 40% segment in terms of income. Through the programme, this group of entrepreneurs was able to undergo mentoring and skills upgrading and training for skill sets essential for business growth/upscaling even with little physical interaction, riding on adaptation and customised delivery with the same ultimate goal in mind, which is helping future proof this important segment of the economy. Modules delivered included financing, digitalisation, emotional well-being and also formulating business strategies, complete with a virtual graduation ceremony.
Employees – Our staff and colleagues continue to be a key focus at CIMB throughout this challenging period. Apart from the investment in technology to support remote working and physically dispersed staff, efforts have been greatly stepped up to ensure connectivity and engagement of employees across the organisation. More frequent townhalls with heads of various business units, recognition and fun interactive sessions, and even online learning sessions in areas outside your immediate field of work with the guidance of subject matter experts demonstrate the organisation’s efforts for employees to remain in touch with one another and continue to be socially connected despite physical distances.
Double digit growth in digital transactions, product and bond sales, and FX transaction volume
SG: COVID-19 has meant that all digital transformation efforts were now put to the test, as the world moved to a contactless, socially distanced and periodically locked-down environments as required by circumstances during the health crisis.
At CIMB, we instituted top-down internal reforms to address digital reliability and availability while preserving and enhancing customer experience. In Malaysia, our online banking service, Clicks, performed markedly better in 2021 versus 2020, where we saw a 50% increase in digital transactions, and a 99.20% service reliability/availability level.
Our product sales via digital grew significantly over the past year. The digital sales of our products accounted for 48% of total sales in Malaysia as of October 2021, compared to 37% a year ago.
We are seeing a similar trend in other markets regionally. The digital bond sales volume in Thailand increased seven times year-on-year (YoY) from THB 0.7 million ($20,867) to THB 5.5 million ($163,946) as of October 2021. This is equivalent to 14% of the total digital bond sales volume and contributed 26% of the total bond sales count in Thailand.
The digital foreign exchange (FX) transaction volume in Singapore grew by 1.5 times YoY from SGD 1.1 billion ($811.92 million) in total transaction volume to SGD 1.7 billion ($1.25 billion) as of October 2021. Digital FX transactions contributed 88% of total FX transaction volume in Singapore, from 75% a year ago. The digital FX transactions accounted for 99.7% of the total FX transaction count in Singapore.
These are some of the tangible achievements in demonstrating the success we had in reaching our customers to serve their needs while ensuring their safety, through prioritising a contactless environment and further accelerating our digital transformation efforts.
Innovate onboarding of Islamic accounts
SG: One innovation that was launched during this period was CIMB’s OctoSavers Account-i, the bank’s first all-digital Islamic account where the account opening and onboarding process are self-executed entirely online. The accompanying debit card is mailed to customers to ensure a convenient branchless experience, and an end-to-end digital onboarding.
We will continue to strengthen and enhance our digital banking platforms to increase efficiency and enhance customer experience. Further ahead, we aim to provide more personalised, relevant and bespoke offerings and financial solutions to our customers. This will be effected through selective investments in our digital businesses.
FBP: With so much uncertainty in 2021, how will your bank remain resilient? How do you plan to support your customers, employees and the community to be resilient?
Improve usability and develop next-generation platforms
SG: CIMB Group’s ambition is to be the leading Southeast Asian bank under our Forward23+ strategic plan. We are taking a focused approach to where we invest across the business to ensure that we tap on key segments and high growth opportunities in the region.
We will continue to invest in technology to support the evolving needs of our customers, employees and other stakeholders. Even as we continue to enhance our current platforms and improve usability and reliability, we are already in the process of developing our next-generation platforms. This is to ensure our platforms are future-proof and able to support both our customers and our organisation in the post-COVID-19 financial services landscape and beyond.
We will continue to digitise for value. It is not simply about cutting costs, but rather a stringent cost discipline and optimisation to ensure we are maximising the impact of our spending for greater value. This will ensure we are investing in the right areas, and as efficiently as possible, to support targeted growth areas in the uncertain economic landscape.
CIMB as a whole will continue to monitor the environment through a “risk management– opportunities continuum” to leverage opportunities for innovation and emerging market needs and trends. This is while being alert to the various risks that may jeopardise the organisation’s well-being. Agility and adaptability will continue to be a part of the mindset of the organisation.
We have recently announced our commitment to invest MYR 150 million ($35.8 million) over five years and 100,000 in employee volunteerism hours annually by 2024 to positively impact lives, communities and businesses across Southeast Asia.
FBP: In the space of a year, the competitive landscape in banking has changed. Several of the confident challengers (digital banks) from this time last year have struggled or been acquired. What insights into resilience for banks and banking can we gain from this?
SG: As we observe the challenges faced by the challengers, including the standalone digital banks, the learnings from their difficulties will form the basis of planning and strategy for resiliency. These are often not new nor non-obvious issues but questions relating to whether to support or venture into this area as a competitor to the larger established “too-big-to-fail banks”. This has even occurred with established banking franchises launching their own digital standalone units, in the US and UK, for example, only to have them shut down within a year or two.
A major issue facing the challengers is the lack of profitable scale, and great difficulty in supporting their cost pools, from customer acquisition, to marketing and regulatory costs. In some instances, once government support incentive schemes are withdrawn, they face the prospect of loan defaults.
Bigger banks are able to rely on more comfortable profit margins with larger asset bases to rely on for lending. Many of the challengers are still struggling to show a profit. The bigger players have more data on customers in general that allow better risk profiling.
At the customer perception and experience level, customers may be hesitant to switch for fear of the unknown or relatively new challenger brands’ unproven performance and high risk of failure.
In competing with the challengers, the more established banks must continue to develop their digital strength, and ensure they provide an attractive and differentiated service proposition.
FBP: Tell us your personal story. How were you in your younger years or early days of your career? Did you always want to work in a bank? How did you rise up the ranks to be the CEO of the bank?
SG: As CEO of the consumer banking business of the larger CIMB group, my priority has been directed towards aligning the digital aspirations of the business with the larger digital transformation goals of the group.
I’ve always aspired to be an engineer. However, while pursuing engineering at the Indian Institute of Technology, I realised that it wasn’t my true love. After that, I decided to do my MBA and eventually stumbled into a bank. So, while I ended up working in a bank purely by chance, it has turned into a passion and a lifelong banking career.
Throughout my entire journey, I’ve been very fortunate to have worked in great organisations with amazing teams and inspiring leaders. Collectively, they have been instrumental in improving me as an individual and making me a better manager. One of the many attributes that contributed to my current success is being observant and learning best practices from others. It has helped me in many situations and allowed me to always stay one step ahead.
On top of that, treating my work with an owner’s mindset, with a keen sense of accountability, has always kept me focused. This helps me ensure that the team remains focused on our end goals with a sense of urgency and ownership, and avoids complacency by challenging the status quo.
FBP: What does resilience mean to you personally? How does one become resilient?
Show resiliency through toughness and see difficulties as an opportunity to improve and become better
SG: My interpretation of resilience is “the capacity to recover immediately from difficulties”, or in more layman terms, “toughness”. Generally, I treat these difficulties and setbacks as an opportunity to learn, re-evaluate and improve in order to do better in the future. I’ve always maintained a positive mindset and the stubborn determination to not give up easily. That has made me who I am today.
FBP: COVID-19 is a crucible within which resilient leadership has been refined. What do you think is at the heart of resilient leadership?
SG: Many of the personal traits of being resilient can be re-imagined within the organisational context. Resilient leadership is about projecting these attributes from a personal level to a larger organisational context, being mindful that you are interacting with exponentially larger sets of people. If you value people, learn to trust them, and are astute in selecting the people who can contribute to your organisation, you will have fulfilled one of the key responsibilities of resilient leadership.